Companies That Kept DEI Policies Have Fared Well, New Research Finds

Following President Donald Trump’s executive orders ending DEI programs within the federal government, some of the country’s largest companies, including Google and Target, quickly scaled back or scrapped their diversity, equity, and inclusion (DEI) commitments amid threats of federal scrutiny. Others, including Costco, Apple, and Delta Air Lines, stood their ground and maintained their commitments.

New research shared with The Guardian reveals that companies that maintained commitments to DEI didn’t see a direct financial penalty. The study found that S&P 500 companies that kept their DEI policies intact performed about as well financially as companies that rolled them back, reports The Guardian.

Jacob Grumbach, an associate professor at UC Berkeley’s Goldman School of Public Policy, analyzed how firms performed after President Trump’s executive order, using what economists call “abnormal returns,” a metric that represents the variance between a stock’s projected performance and its actual market outcome. Grumbach’s analysis found no measurable difference in financial performance between companies that retained their diversity and inclusion programs and firms that eliminated them. His findings challenge the “go woke, go broke” narrative that gained momentum in 2023 following conservative boycotts of Bud Light and Target for its Pride merchandise. 

Grumbach tracked corporate DEI initiatives by analyzing news coverage, anti‑DEI shareholder proposals and votes, and data from DEI Watch, a corporate accountability tracker. “No matter how we measure DEI in companies, we find the same answer,” Grumbach said. Holding on to DEI promises had no measurable impact on financial performance, according to the study. 

The broader implication extends beyond DEI. Grumbach says the findings show how organizations fare when they resist political pressure. “This shows that large U.S. corporations really do have leeway and the ability to sort of do non-compliance to executive branch pressure and end up fine,” he told The Guardian. While some executives may still fear regulatory retaliation, such as less favorable treatment from the executive branch, delayed merger approvals, or aggressive tax auditing, the market itself does not appear to punish firms that stay the course. 

Changing course on DEI in response to political pressure can carry its own risks. When Target dropped its DEI programs in January 2025 amid backlash, for example, the retailer faced renewed calls for a boycott from shoppers. The episode illustrates the broader challenge companies face when navigating competing pressures. As former Medtronic CEO and author Bill George said during a fireside chat at From Day One's Minneapolis conference, “It’s easy to follow your true north, follow your values, your purpose, until you get under pressure, and you have to decide between two options. And that’s the real test. Where there may be sacrifices you have to make, do you have the moral courage to step up and follow what you believe, or do you back down?” 

George noted that leaders who stand firm, like Costco CEO Ron Vachris, whose company saw shareholders reject an anti-DEI proposal by an overwhelming 98% margin, suggest that “having a moral center is actually good for business.”

Ade Akin covers artificial intelligence, workplace wellness, HR trends, and digital health solutions.

(Photo by ZenSaBi/iStock)